Chromatin insulators are functionally conserved DNA-protein complexes situated throughout the genome that organize independent transcriptional domains. Previous work implicated RNA as an important cofactor in chromatin insulator activity, although the precise mechanisms are not yet understood. Here we identify the exosome, the highly conserved major cellular 3 to 5 RNA degradation machinery, as a physical interactor of CP190-dependent chromatin insulator complexes in Drosophila. Genome-wide profiling of exosome by ChIP-seq in two different embryonic cell lines reveals extensive and specific overlap with the CP190, BEAF-32, and CTCF insulator proteins. Colocalization occurs mainly at promoters but also boundary elements such as Mcp, Fab-8, scs, and scs, which overlaps with a promoter. Surprisingly, exosome associates primarily with promoters but not gene bodies of active genes, arguing against simple cotranscriptional recruitment to RNA substrates. Similar to insulator proteins, exosome is also significantly enriched at divergently transcribed promoters. Directed ChIP of exosome in cell lines depleted of insulator proteins shows that CTCF is required specifically for exosome association at Mcp and Fab-8 but not other sites, suggesting that alternate mechanisms must also contribute to exosome chromatin recruitment. Taken together, our results reveal a novel positive relationship between exosome and chromatin insulators throughout the genome. Previous studies point to an important role for RNA in gypsy chromatin insulator function in Drosophila; however, the identity of these putative insulator-associated RNAs is not currently known. Here we utilize RNA-immunoprecipitation and high throughput sequencing (RIP-seq) to isolate RNAs stably associated with gypsy insulator complexes. Strikingly, these RNAs correspond to specific sense-strand, spliced, and polyadenylated mRNAs, including two insulator protein transcripts. In order to assess the functional significance of these associated mRNAs independent of their coding function, we expressed untranslatable versions of these transcripts in developing flies and observed both alteration of insulator complex nuclear localization as well as improvement of enhancer-blocking activity. Together these data suggest a novel, noncoding mechanism by which certain mRNAs contribute to chromatin insulator function.